High Court Rules Consumer Financial Protection Bureau is Unconstitutional

In a decision rendered on Monday 6-29-20, the Supreme Court said the structure of the Consumer Financial Protection Bureau is unconstitutional. However, the court stopped short of abolishing the watchdog agency. Instead, the court will allow the head of the agency to be fired at will, rather than a president having to prove “inefficiency, neglect of duty, or malfeasance in office,” as outlined in the 2010 Dodd–Frank law that established the CFPB. Monday’s ruling will not have an immediate impact on the CFPB – the agency currently has an acting director who hasn’t yet been confirmed by the Senate and could be fired at will even before today’s decision from the nation’s highest court. Another result of the decision could slow or stop the FHFA’s efforts to free Fannie Mae and Freddie Mac from government conservatorship.